U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 8-K/A-1
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 5, 1998 (September 8, 1998)
GREENMAN TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13776 71-0724248
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
7 Kimball Lane
Building A
Lynnfield, Massachusetts, 01940
(Address of principal executive offices, including zip code)
(781) 224-2411
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report.)
Item 2. Acquisition or Disposition of Assets
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<PAGE>
On September 8, 1998, GreenMan Technologies Inc., ("GMTI" or the
"Registrant") acquired the scrap tire collection and processing assets
("Acquired Assets") of United Waste Service, Inc. ("United"), a wholly owned
subsidiary of Republic Services, Inc. ("Republic"). The acquisition was made
pursuant to an Asset Purchase Agreement, dated September 8, 1998, by and among
GMTI, GreenMan Acquisition Corp., and United and included in this Report as
Exhibit 2. Further information about the aquistion reported herby may be found
in the Registrants' press release of September 8, 1998, included as Exhibit 99
to this Report. In consideration for the Acquired Assets, GMTI paid Republic (1)
$850,000 in cash and (2) issued to Republic $3,200,000 of the Company's Series B
Preferred Stock ("Preferred Stock"). The Preferred Stock is convertible into
shares of GMTI's common stock beginning in February 2001 based upon the higher
of (1) the trailing 15 day average closing bid (as defined) prices prior to the
conversion date or (2) the average of the closing bid prices during the period
from September 3, 1998 to February 3, 2001. GreenMan obtained the $850,000 cash
component of the purchase price through a loan from Heller Financial, Inc. This
loan is guaranteed by GMTI, GreenMan Technologies of Georgia, Inc., two officers
and one former officer of GMTI and is secured by certain of the Acquired Assets.
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired
United Rubber Recycling (Lawrenceville and Batesburg facilities only)
A division of United Waste Service, Inc.
Independent Auditor's Report............................................. F-1
Statement of Divisional Assets, Liabilities and Parent's Equity.......... F-2
Statement of Divisional Income........................................... F-3
Statement of Divisional Cash Flows....................................... F-4
Notes to Financials...................................................... F-5
(b) Pro Forma Financial Information
GreenMan Technologies, Inc. Proforma Combined Financial
Statements (unaudited)................................................. F-7
Pro Forma Combined Balance Sheet - August 31,1998........................ F-8
Pro Forma Combined Statement of Operations .............................. F-9
Notes to Pro Forma Combined Financial Statements......................... F-10
The unaudited pro forma combined balance sheets as of August 31, 1998 gives
effect to the acquisition of the scrap tire collection and processing assets of
United Rubber Recycling (Lawrenceville and Batesburg facilities only), as if the
acquisition, accounted for as a purchase, had occurred on September 1, 1997 and
the unaudited pro forma combined statement of operation for the year ended
August 31, 1998 gives effect to the acquisition as if the acquisition had
occurred at the beginning of the period presented. The proforma information is
based on historical financial statements of United Rubber Recycling and GMTI.
(c) Exhibits
All exhibits listed below were previously filed with the exception of those
marked with an asterisk (*)
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<PAGE>
Exhibit 2 Asset Purchase Agreement, dated as of September 8, 1998,
by and among GreenMan Technologies, Inc. ("GMTI") and
United Waste Service, Inc. ("United")
Exhibit 3 Certificate of Designations, Preferences and Rights of
Class B Convertible Preferred Stock of GMTI, dated
September 3, 1998 by the Board of Directors of GMTI
Exhibit 10(a) Bill of Sale, Assignment and Assumptions Agreement,
dated as of September 4, 1998, by and among GreenMan
Acquisition Corp. ("GAC") and United.
Exhibit 10(b) Lease dated September 3, 1998 by and between United as
landlord and GMTI as tenant.
Exhibit 10(c) Covenant Not To Compete, dated September 4, 1998 by and
among United, GMTI and Republic Services, Inc.
Exhibit 10(d) Disposal Agreement, dated as of September 4, 1998 by and
among United, GMTI and Pine Ridge Recycling, Inc.
Exhibit 10(e) Registration Agreement, dated September 4, 1998 GMTI and
Republic Services, Inc.
Exhibit 10(f) Loan and Security Agreement by and among GreenMan
Technologies of Minnesota (GMTM"), GreenMan Technologies
of Georgia ("GMTG") and Heller Financial Inc. ("Heller")
Exhibit 10(g) First Amendment to the Loan and Security Agreement of
Exhibit 10(f), dated as of September 3, 1998, by and
between GMTM,GMTG,GAC,GMTI, certain officers of the
Company and Heller.
Exhibit 10(h) Promissory Note - Equipment issued by GMTM and GMTG in
favor of Heller, dated September, 1998
Exhibit 10(i) Form of Guaranty delivered by the Company and certain
officers of the Company in favor of Heller.
Exhibit 20 * Consent of Smith and Radigan
Exhibit 99 Press Release dated September 8, 1998
- -------------------------
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934 , the
Registrant certifies that it has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
By: GreenMan Technologies, Inc.
/s/ Charles E. Coppa
--------------------
Charles E. Coppa
Acting Chief Financial Officer,
Treasurer and Secretary
Date: April 2, 1999
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<PAGE>
INDEPENDENT AUDITORS REPORT
To the Board of Directors
United Waste Services, Inc.
We have audited the accompanying statement of divisional assets, liabilities and
parent's equity of United Rubber Recycling (Lawrenceville and Batesburg
facilities only), a division of United Waste Service, Inc. as of August 31,
1998, and the related statements of divisional income and cash flows for the
year then ended. These financial statements are the responsibility of the
Division's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of United Rubber Recycling
(Lawrenceville and Batesburg facilities only), a division of United Waste
Services, Inc. as of August 31, 1998, and the results of its operations and its
cash flows for the year then ended, in conformity with generally accepted
accounting principles.
As discussed in Note A to the financial statements, the Division has been
operated as an integral part of its Parent's operations and is significantly
dependent on the parent corporation. Hence, the financial statements presented
may not be indicative of the results of operations that would have been obtained
if the Division had been operated as an independent entity.
/s/ Smith & Radigan
Atlanta, Georgia
November 4, 1998
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<PAGE>
Statement of Divisional Assets, Liabilities and Parent's Equity
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
August 31, 1998
<TABLE>
<S> <C>
ASSETS
Current assets:
Accounts receivable, less allowance for doubtful accounts of $70,000 $ 559,543
Equipment, at cost
Machinery and equipment 2,445,520
Less accumulated depreciation (716,272)
------------
1,729,248
------------
$ 2,288,791
============
LIABILITIES AND PARENTS' EQUITY
Parents equity in division $ 2,288,791
============
</TABLE>
The Notes to Financial Statements are an integral part of these Statements.
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<PAGE>
Statement of Divisional Income
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
For the Year Ended August 31, 1998
Revenue $5,249,914
Cost and Expense:
Cost of sales 3,917,724
General and administrative 164,225
Depreciation 329,071
Bad debt expense 54,025
----------
4,465,045
----------
Divisional income before income taxes 784,869
Current provision for income taxes on divisional income 313,948
----------
Divisional income after income taxes $ 470,921
==========
The Notes to Financial Statements are an integral part of these Statements.
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<PAGE>
Statement of Divisional Cash Flows
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
For the Year Ended August 31, 1998
<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Divisional income after income taxes $ 470,921
Adjustments to reconcile divisional income after income taxes to net cash
provided by operating activities:
Allocation of corporate expenses to division 154,944
Depreciation 329,071
Bad debt expense 54,025
Income tax expense 313,948
Decrease in accounts receivable 1,643,997
-----------
Total adjustments 2,495,985
-----------
Net cash provided by operating activities 2,966,906
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (290,344)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash collected by parent on behalf of division (6,758,511)
Cash payments made by parent on behalf of division 4,081,949
-----------
Net cash used by financing activities (2,676,562)
-----------
Net effect on cash from divisional activity $ --
===========
</TABLE>
The Notes to Financial Statements are an integral part of these Statements
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<PAGE>
Notes to Financial Statements
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
For the Year Ended August 31, 1998
Note A - Summary of Significant Accounting Policies
Nature of Operations
The United Rubber Recycling (URR),a Division of United Waste Service, Inc. (the
Parent), operates scrap tire collection and processing facilities in
Lawrenceville, Georgia and Batesburg, South Carolina. Sales are concentrated in
Georgia and South Carolina.
Basis of Presentation
The accompanying statements of divisional assets, liabilities and parent's
equity, divisional income and cash flows have been prepared from the books and
records maintained by the URR Division and its Parent. The statement of
divisional income and cash flows may not necessarily be indicative of the
results of operations that would have been obtained if URR had been operated as
an independent entity. The statement of divisional income includes allocation of
certain expenses from the Parent which are material in amount. Such expenses are
allocations for overhead. (Note B)
The Parent controls all cash balances and no separate cash balances are
maintained by URR. URR does not have any formal financing arrangements with its
Parent. However, cash needs are met by funds provided by the Parent, essentially
on a demand basis, to the extent funds are required by URR.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period. These
estimates and assumptions involve the areas of allowance for doubtful accounts
and expense allocations from the Parent. Actual results could differ from those
estimates.
Sales
Sales for tire collections are recorded when the tires are received. Sales from
tire material processing are recorded when the tire material has been shipped.
Equipment
The cost of equipment is depreciated over the estimated useful lives (5-10
years) of the related assets using the straight-line method.
Income Tax
Income taxes are allocated to the division at statutory rates.
Maintenance and Repairs
Maintenance and repairs expenses are charged to operations when incurred.
Betterments and major renewals are capitalized.
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<PAGE>
Notes to Financial Statements
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
For the Year Ended August 31, 1998
Note B -- Parent's Equity in Division
Activity in parent's equity in division includes disbursements made on behalf of
URR, cash collected on behalf of URR, divisional income and expenses allocated
to URR by the Parent. The following is a summary of activity in parent's equity
in division during the year ended August 31, 1998.
Balance at beginning of year $ 4,025,540
Less:
Cash collected by parent on behalf of URR (6,758,511)
Add:
Cash disbursements made by parent on behalf of URR 4,081,949
Corporate expenses allocated to URR by parent 154,944
Corporate income taxes allocated to URR 313,948
URR divisional income after income taxes 470,921
-----------
Balance at end of year $ 2,288,791
===========
Certain corporate expenses incurred by the Parent are allocated to the various
divisions of the Parent, including URR. These costs are allocated utilizing
methods deemed reasonable and appropriate by management of the Parent.
Rent and utility expense of $154,944 were allocated by the Parent to URR.
Note C -- Subsequent Event
URR's Parent entered into a purchase and sale agreement with a buyer, whereby
the Parent sold all of the operational assets of URR to the buyer as of
September 4, 1998.
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<PAGE>
GreenMan Technologies, Inc.
and
United Rubber Recycling (Lawrenceville and Batesburg facilities only)
A division of United Waste Service, Inc.
Proforma Financial Statements
<PAGE>
Pro Forma Combined Balance Sheet
August 31, 1998
(unaudited)
<TABLE>
<CAPTION>
ASSETS
GreenMan United Pro Forma
Technologies, Rubber Adjustments DR Pro Forma
Inc. Recycling (CR) Combined
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents ....................... $ 171,114 $ -- $ -- $ 171,114
Accounts receivable, net ........................ 1,497,357 559,543 (559,543) 1,497,357
Inventory ....................................... 300,938 -- -- 300,938
Insurance claim receivable ...................... 3,047,690 -- -- 3,047,690
Other current assets ............................ 792,748 -- -- 792,748
------------ ------------ ------------ ------------
Total current assets ...................... 5,809,847 559,543 -- 5,809,847
------------ ------------ ------------ ------------
Property, plant and equipment, net ................ 7,158,402 1,729,248 605,752 9,493,402
------------ ------------ ------------ ------------
Other assets:
Goodwill, net ................................... 445,691 -- 2,015,000 2,460,691
Other assets .................................... 1,724,430 -- -- 1,724,430
------------ ------------ ------------ ------------
2,170,121 -- 2,015,000 4,185,121
------------ ------------ ------------ ------------
$ 15,138,370 $ 2,288,791 $ 2,061,209 $ 19,488,370
============ ============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Convertible notes payable, other .................. $ 90,223 $ -- $ -- $ 90,223
Notes payable,other ............................... 1,189,731 -- 176,004 1,365,735
Accounts payable and accrued expenses ............. 3,256,883 -- 300,000 3,556,883
Obligations under capital leases, current ......... 2,616,250 -- -- 2,616,250
------------ ------------ ------------ ------------
Total current liabilities ................... 7,153,087 -- 476,004 7,629,091
Convertible notes payable ......................... 1,014,680 -- -- 1,014,680
Convertible notes payable, other .................. 209,777 -- -- 209,777
Notes payable, non-current portion ................ 2,908,352 -- 673,996 3,582,348
------------ ------------ ------------ ------------
Total liabilities ........................... 11,285,896 -- 1,150,000 12,435,896
------------ ------------ ------------ ------------
Stockholders' equity
Preferred stock ................................... -- -- 3,200,000 3,200,000
Common stock ...................................... 65,969 -- -- 65,969
Additional paid-in capital ........................ 21,180,871 -- -- 21,180,871
Parents equity in division ........................ -- 2,288,791 (2,288,791) --
Accumulated deficit ............................... (17,394,366) -- -- (17,394,366)
------------ ------------ ------------ ------------
Total stockholders' equity .................. 3,852,474 2,288,791 911,209 7,052,474
------------ ------------ ------------ ------------
$ 15,138,370 $ 2,288,791 $ 2,061,209 $ 19,488,370
============ ============ ============ ============
</TABLE>
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<PAGE>
Notes to Financial Statements -- Continued
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
August 31, 1998
Pro Forma Statement of Operations
Year Ended August 31, 1998
(unaudited)
<TABLE>
<CAPTION>
GreenMan Pro Forma
Technologies, United Rubber Adjustments Pro Forma
Inc. Recycling DR (CR) Combined
<S> <C> <C> <C> <C>
Revenues ....................................... $ 12,455,208 $ 5,249,914 $ -- $ 17,705,122
Cost of sales .................................. 8,484,956 4,246,795 -- 12,731,751
------------ ------------ ------------ ------------
Gross profit ................................... 3,970,252 1,003,119 -- 4,973,371
Operating expenses:
Research and development ................... 740,319 -- -- 740,319
Selling, general and administrative ........ 4,721,143 218,250 (1) 201,500 5,140,893
------------ ------------ ------------ ------------
Total operating expenses ............... 5,461,462 218,250 201,500 5,881,212
------------ ------------ ------------ ------------
Operating (loss) profit ........................ (1,491,210) 784,869 (201,500) (907,841)
Other income (expenses) ........................ (2,484,561) -- (2) (80,710) (2,565,271)
------------ ------------ ------------ ------------
Income (loss) from continuing operations ....... (3,975,771) 784,869 (282,510) (3,473,412)
Discontinued operations:
Loss from discontinued operations .......... (513,920) -- -- (513,920)
Loss on disposal of discontinued
operations ................................. (1,100,000) -- -- (1,100,000)
------------ ------------ ------------ ------------
(1,613,920) -- -- (1,613,920)
Income tax expense ............................. -- (313,948) (3) 313,948 --
Net income (loss) .............................. $ (5,589,691) $ 470,921 $ 31,438 $ (5,087,332)
============ ============ ============ ============
Net income (loss) per share .................... $ (1.48) $ (1.34)
============ ============
Shares used in calculation of net income
(loss) per share ............................... 3,784,026 3,784,026
============ ============
</TABLE>
Notes to Pro Forma Combined Financial Statements
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<PAGE>
Notes to Financial Statements -- Continued
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
August 31, 1998
The unaudited Proforma Combined Balance Sheet has been prepared form the
unaudited August 31, 1998 balance sheet of GreenMan Technologies, Inc. ("GMT")
and the audited August 31, 1998 balance sheet of United Rubber Recycling
(Lawrenceville and Batesburg facilities only) ("United"). The unaudited Pro
Forma Combined Statement of Operations for the year ended August 31, 1998 has
been prepared for the unaudited quarterly Statements of Operations of GMT and
the audited Statement of Divisional Income of United. The unaudited Pro Forma
Combined Balance Sheet as of August 31, 1998 gives effect to the acquisition of
the United assets as if the acquisition had occurred at the beginning of the
period presented. The unaudited Pro Forma Combined Balance Sheet and the
unaudited Combined Statement of Operations for the year ended August 31, 1998
also gives effect to the following:
(A) To reflect the acquisition of the scrap tire collection and processing
assets of United pursuant to the terms of the Asset Purchase Agreement for
$4,200,000.
(1) To record the amortization of acquisition related goodwill.
(2) To record interest expense on acquisition related debt.
(3) To reverse the income tax provision recorded by United during the year
ended August 31, 1998.
-14-
Notes to Financial Statements -- Continued
UNITED RUBBER RECYCLING (LAWRENCEVILLE AND BATESBURG FACILITIES ONLY),
A DIVISION OF UNITED WASTE SERVICE, INC.
August 31, 1998
Exhibit 20
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statements of
GreenMan Technologies, Inc. on Form S-3 (Nos. ) of our report dated November 4,
1998, with respect to the balance sheet of United Rubber Recycling
(Lawrenceville and Batesburg facilities only), a division of United Waste
Service, Inc. as of August 31, 1998, and the related statements of operations
and cash flows for the year ended August 31, 1998, which report appears in the
Form 8-K/A-1 of GreenMan Technologies, Inc. dated April 2, 1999.
Smith & Radigan
Atlanta, GA
March 31, 1999
